[Continued from part 1]

Secondly, I feel very strongly -- wait a minute -- (applause) -- this is a sober forum -- or a forum of sober people, I hope.  (Laughter.)  There is a -- there is -- I have a fundamental problem with a -- look, a lot of people didn't like the strategy.  In other words, people said, you shouldn't have done that, Mr. President.  And I fully understand that aspect of it.  I also found it quite ironic that the general I asked to lead the strategy, a counterinsurgency expert, David Petraeus, gets approved by the United States Senate 81 to nothing, and then, on his way over, they begin to micromanage his ability to follow through on the strategy.

So we have just a policy difference.  When it's all said and done, I believe these troops will get the money they need.  I think you're going to see there to be a continual debate on this subject.  Interestingly enough, I said in a forum yesterday in Ohio and I'll share with you now, I thought at this point this year, I would be announcing troop reductions in Iraq, because I felt -- this is, again, a year ago -- I felt that the Iraqi government was better prepared to be able to handle their own security.  And by the way, they want to handle their own security.  The Prime Minister is constantly saying, let me do more of it.  We just believe he's not quite ready to do so, and that it's in our interest to be able to help him to be able to take on more of the security challenges.  And I thought we'd be reducing troops.

And then what happened was, the Samarra bombing took place by al Qaeda, which caused there to be a sectarian outrage.  And because the government was ill-prepared to provide enough security in the capital, people began to use militias to provide security.  And the sectarian outrage, the killing started to get out of hand.  And I had a decision to make:  withdraw from the capital and just kind of hope for the burnout theory -- as you know, I was worried about chaos, and into chaos comes more extremists -- or reinforce; I chose to reinforce, all aiming to get to a position where we'll be able to reposition our forces.

I liked what James A. Baker and Lee Hamilton suggested.  I thought that was a good suggestion.  And that is to be in a position at some point in time where our troops are embedded with the Iraqi units -- in other words, there's Iraqi units providing security with a handful of U.S. troops -- helping them learn what it means to be a good military.  That's not a given.  It's hard to have a good military.  It's hard to have a chain of command with logistical support and maintenance support.  And we're good at it.  And we can help others become good at it.  And embedding troops and training troops makes sense for me.  I like the idea of having our troops on the over-horizon presence, to be able to help bail out extreme situations.  I really want to make sure that our special ops stays on the hunt for al Qaeda in Iraq.  We can't let al Qaeda develop another safe haven.  Listen, we spent a lot of energy to drive al Qaeda out of Afghanistan; we don't want them to be able to establish a same type of save haven in Iraq.  That's where I would like to be.

I made the judgment, along with our military commanders, we could not get there until we provided enough security.  And I fully understand this is a rough war.  As I mentioned in my speech -- let me put it more bluntly:  The enemy has got an advantage.  They know that a spectacular bombing is going to make it on the news, and it shakes people's conscience, and it should.  Ours is a nation that has deep compassion for human life and human dignity.

But they also know it makes people question whether or not we can succeed in Iraq.  Remember, we believe most of the spectaculars, like the ones you saw -- I can't tell you for certain Wednesday's bombing was al Qaeda.  In other words, I don't have the -- I can speculate.  But I can tell you a lot of the spectacular bombings have been al Qaeda.  A lot of the suicide bombings have been al Qaeda.  That's why I said al Qaeda is the main threat for peace, because what they're trying to do is shake the confidence of the Iraqi people and their government, and the coalition's ability to provide security, and shake our confidence.

And, you know, as I say, it is tempting to think, well, just pull out of there and everything is going to be fine.  I firmly believe, however, that one of the lessons of September the 11th is that if we were to concede Iraq to basically al Qaeda, in a sense, that they would follow us here; that oceans no longer protect us.  And it's also important for you to know that my thinking was deeply affected on September the 11th, 2001.  And, therefore, a lot of the core of my thinking is to work to protect the United States as my most solemn obligation.

Yes, sir.

Q    (Inaudible.)

THE PRESIDENT:  No, thank you.  His question was, one, the relationship with Tony Blair; two, they have reduced their troops in Basra, in southern Iraq, and has that affected our relationship.

First, I have found Tony Blair to be a stand-up man.  He's the kind of person who keeps his word.  He's a strategic thinker.  He thinks beyond the moment, to be able to try to project out beyond the current, so that the decisions that we have made jointly are decisions that end up yielding a long-term peace.

He, of course, like a good ally, informed me of his government's intentions to reduce their presence in Basra.  I concurred with him because the conditions on the ground were such that he didn't need to keep as many troops there as were initially stationed there.  Secondly, what's interesting, as he made the announcement on Basra, he also made the announcement that they're going to send more troops into Afghanistan.  Blair knows what I know -- Prime Minister Blair knows what I know, that we're in a global war, and that we think about Afghanistan and Iraq as separate wars; they're of the same war, they're just different theaters of this war.

He also knows what I know, that we have got to work really closely and share intelligence, and that's one of the reasons I appreciate Pete so much.  He understands the intelligence business as a key component of keeping the country safe.  We've got to share intelligence.  This is -- Tony Blair is the Prime Minister of a country which has been attacked; so has ours.  And -- no, I appreciate you bringing him up, he's solid.  And in my judgment, the world needs courageous leadership, people like Tony Blair.

Yes, sir.

Q    Thank you, Mr. President.  What's the next step for the United States, or even the United Nations, in dealing with the belligerent behavior of Iran with regards to nuclear development?

THE PRESIDENT:  Yes, thank you.  Excellent question.  You go to school here?  No.  (Laughter.)  I was going to say, give the man an "A."

First of all, you do understand Iran is a Shia nation primarily.  Interestingly enough, though, only 50 percent of the nation is Persian.  A great portion of Iran is Azeri, Baloch, other kinds of nationalities make up their country.

The Iranians have defied international organizations in an attempt to enrich uranium – and, we believe, because they want to have a nuclear weapon.  And I believe this challenge is one of the most significant challenges we face -- "we," the free world, face.  There's a lot of reasons why.

One, just as an example, you really don't want a regime that funds terrorist organizations like Hezbollah to have a nuclear weapon as a part of their capacity to create the conditions, for example, of diplomatic blackmail.  Secondly, the current leader of Iran has -- I can't remember exactly his words, but the sum of them were that the destruction of one of our allies was important to them -- that would be Israel.

Third, it's ironic, isn't it, that any time a democracy begins to take hold in the Middle East, extremist groups prevent that democracy from moving forward.  One such democracy is Lebanon, a wonderful little country.  And yet there is a Syrian influence -- Syria uses not only their own agents inside the country, but Hezbollah, to destabilize this young democracy.  And Hezbollah is funded by Iran.  In other words, the Iranian regime's current posture is to destabilize young democracies.  And they're doing so in Iraq, as well.

So our objective is to rally the world to make it clear to the current regime that if they continue their practices they will continue to be isolated.  And we're making interesting progress.  We've passed several U.N. Security Council resolutions, the primary benefit of which is to say to the Iranian regime, and equally importantly the Iranian people, that countries as diverse as the United States and China and Russia and parts of Europe will isolate you, will deny you, the Iranian people, the benefits that you deserve.  Iran is a proud country with a great tradition, and good, hardworking people.  And yet their government is making decisions that endanger peace, and at the same time will continue to lead to isolation.  And so should the Iranian people worry about isolation?  I think so, because you're missing economic opportunities.  You're missing the chance to improve your lives.  You're missing the chance to enhance your country's great history.

The choice is up to the Iranian government as to whether or not they will be accepted into the family of nations, all aimed at promoting peace and economic prosperity.  They've made a bad choice up to now.  And so we'll continue to work hard with the rest of the world, all aiming at solving this very difficult problem diplomatically.

Yes, ma'am.

Q    (Inaudible.)

THE PRESIDENT:  Sure.

Q    I think that's a great idea.  I was wondering, we did have a group -- a commission, I believe, here, that was discussing how to solve our Iraq problems, but we really haven't implemented the advice from --

THE PRESIDENT:  Baker-Hamilton.

Q    -- Baker-Hamilton commission.  I was wondering how we were going to be able to convince the countries that participate in this conference in Egypt that we will actually consider implementing their advice --

THE PRESIDENT:  That's a good question.  First, there was a couple of aspects of Baker-Hamilton -- a lot of it had to do with troop posture.  And Baker-Hamilton recommended that, as I described, a troop presence to help keep the territorial integrity of Iraq, to embed, to train, to be over the horizon to chase down extremists.  That's pretty much what they recommended, and I agree.  The problem is -- and by the way, on, like, page 70-something in their book, they said:  And the United States may have to increase troop levels necessary to be able to get there.  And that's what I did.  (Laughter and applause.)  Wait a minute, wait a minute -- because I realize that we couldn't be in a position on the troop postures they recommended if the capital went into flames.  That's a judgment I made.

By the way, with the advice of a lot of people -- and just so you know, I spend a lot of time listening to our military.  I trust our military, I like our military, I'm impressed by our military.  I spend a lot of time talking to Condi Rice.  I spend a lot of time talking to allies in the Congress, and I spend a lot of time listening to and talking to people who have a different point of view.

It was after this considered judgment that I made that decision, all aiming at some point in time.  Now, the problem is, the Congress, many of whom think that it's a good idea, however are unwilling to allow conditions on the ground to make the decisions as to when we can ever get there.  I don't have that luxury.  I must allow conditions on the ground to dictate our position in order to make decisions.

Now, a lot of what Baker-Hamilton talked about was -- or some of what they talked about was the diplomatic initiatives.  There were -- they talked about a regional conference, and we're happy to participate.  They also suggested that the United States enter into bilateral negotiations with Syria, for example.  And this is where I have a disagreement.  As you know -- as you may not know, when I was a younger lad, Jimmy Baker was in Houston and a good friend of my family's, and in spite of my deep affection for him, I invited him into the Oval Office and said, I disagree with you.  And he said, fine, I disagree with you.  (Laughter.)

And the reason I do is because -- now, there's a difference between a regional conference, in my judgment, and -- I'll tell you what I hope we can gain out of it -- but I do want to address why it's -- I think it would be counterproductive at this point to sit down with the Syrians, because Syria knows exactly what it takes to get better relations with the United States.  It's not as if they haven't heard what we're for.  And we're for making sure they leave the Lebanese democracy alone.  They have undermined Lebanon's democracy.  When the United States and France worked together on a U.N. resolution, the U.N. demanded that they leave Lebanon.  They did, but they're still meddling.

Secondly, there's a man who was assassinated, named Hariri.  It's very important that there be a full investigation of the Hariri murder.  And they know we expect them to support that investigation.  We believe they're hindering that investigation right now.  Thirdly, they're providing safe haven for -- I'll just say they've got -- Hamas and Hezbollah have got centers of influence in Damascus.  That's unacceptable to the United States.  We have made it clear to them that in order for them to have better relations that they must rid their capital of these organizations, all aimed at wreaking havoc in the Middle East, and preventing, for example, the development of a peaceful Palestinian state that can live with Israel side by side in peace.

And, finally, Syria is a transit way for suicide bombers heading into Iraq.  And some, they have been particularly unhelpful in achieving peace we want.  What happens when people go sit down with Bashar Assad, the President of Syria, he walks out and holds a press conference, and says, look how important I am; people are coming to see me; people think I'm vital.  But he hasn't delivered on one request by the free world.

I asked our security folks, the national security folks to give me a list of all the foreign advisors and foreign secretaries of state, and all the people that have gone to see Bashar Assad.  And every time they send one in there, we say, why, why are you sending somebody there, what is your intention, what have you asked them to do?  They all say basically what I just said, and nothing has happened.  And my attitude is, is that I think talks would be counterproductive.  I'm interested not in process, I'm interested in results.  I'm interested in this leader turning Syria into a positive influence for peace, not an obstructionist to peace.

On Iran, I said we'll talk to Iran, but they've got to suspend their enrichment.  Diplomacy works when people sit down at the table and need something from you.  That's how diplomacy works.  It is, in my judgment, just talking for the sake of talking doesn't yield positive results often.  As a matter of fact, it can reaffirm behavior that is not in our interests.  So we've said to the Iranians, we will talk with you, but first do what the world has asked you to do, and suspend the enrichment of uranium.

As I said in my talk here, and I'm speaking to you -- I'm also speaking to the Iranian people.  They must know that our beef with Iran is not with the people of Iran, it's with the government of Iran that continues to make decisions that isolates you from the opportunities of a fantastic world.

Now, what do we hope to gain out of the regional conference? It's very important for us, first of all, for the Iraqi democracy to gain acceptance.  This is a new government.  Remember, these folks were run by a tyrant for years, and now we're watching the emergence of a new government that has not been in office for a year yet, by the way.  We've been there for more than a year, but the constitution was passed in '05, late '05, the new government was seated in June of '06, so Prime Minister Maliki -- and it's important, I think, for the world to recognize, or the region to recognize that he was duly elected by the people of Iraq, and represents the will of the Iraqi citizens.  It's important for people to express their support for this new government.

Let me just talk about a couple of countries.  One, Saudi Arabia.  My friend, His Majesty, the King, kindly forgave 80 percent of the debt in the run-up to this conference; 80 percent of Saudi debt to Iraq was forgiven.  That's a strong gesture.  It's a gesture that I'm confident will spread goodwill in Iraq.  And so the conference can be a success on that alone.

I will tell you, however, that His Majesty is skeptical about the Shia government in Iraq.  And it's going to be very important for Prime Minister Maliki to follow through on the new de-Baathification law, for example, which reaches out to Sunnis.  People say, what does that mean?  Well, the law was passed that basically said if you were a member of the Baath party, you couldn't participate in much of civil society.  And in some provinces, that is -- that's precluded people from being school teachers.  In other words, if you wanted to be a teacher, you had to sign up for Saddam's deal -- and yet you might not have been a political person.  And so what a lot of folks are watching is to see whether or not there's going to be a reconciliation with the Sunnis who have been affected by the de-Baathification.

The oil revenue sharing is a very interesting aspect, and this is what people are watching for, because most of the oil is in Shia land or with the Kurds.  And, therefore, an equitable sharing agreement of the people's resources throughout society will send a signal that this government is not going to take unnecessary retribution against peaceful Sunnis.  And so the benchmarks that I described are important for America, but they're also important to make sure that further regional conferences are successful.

And so I -- I talked to Condi about this last night -- as a matter of fact, this very subject, about what constitutes success.  And first of all, it's successful to have people come to the table and discuss Iraq and its new form of government.  In other words, the region recognizes there is a new government when they come.  And that's vital.  And then we'll see whether or not some of the pledges, reconstruction pledges, will be met.  Excellent question.

Yes, sir.

Q    Mr. President, thanks for coming to the west coast, first.

THE PRESIDENT:  Looking for the surfboard.  (Laughter.)

Q    You mentioned in your comments, sir, about the American patience.  What's the Prime Minister's take on that?  What is his understanding of American patience?

THE PRESIDENT:  Well, he is -- I don't know, I think he's concerned about his own country's patience, first and foremost.  He's having a tough time.  I will give you my take on patience.  I think that if the American people fully understand the stakes of failure, they'll understand why we're doing what we're doing.  And my own view of patience is that a President -- and I believe Tony Blair agrees with this -- must make decisions on certain principles, and not try to chase opinion polls.  If you make decisions based upon the latest opinion poll, you won't be thinking long-term strategy on behalf of the American people.  (Applause.)

And Tony Blair understands that, as well.  At least that's what I get from him.  That's -- when I talk to him, that's the impression I get.

There weren't opinion polls when Abraham Lincoln was the President.  Believe me, I'm not comparing myself to him, but I just don't think a President like Abraham Lincoln made a decision about whether all men were created equal based upon an opinion poll.   (Laughter.)  Nor do I make an opinion about my strong belief that freedom is universal, and there's no debate.  I believe in the universality of liberty, and I believe liberty has got the capacity to help transform parts of the world into peaceful parts of the world.

That's what I described to you at the end of -- what happened at the end of World War II and at the end of the Korean conflict.  I firmly believe in the power of freedom, and I firmly believe that everybody wants to be free.  As a matter of fact, to take it a step further, I believe there's an Almighty, and I believe a great gift to each man, woman and child in this world is freedom.  That's what I believe.  It is a principle from which I will not deviate.

People said to me -- the guy asked a question the other day, you don't like the opinion polls and all that stuff -- I said, any politician who says they don't want to be popular, you know -- you can't win if, like, 50-plus-one don't like you for a moment.  (Laughter.)  You can't make your decisions, however, based on something that just changes; it just, poof.  And when it's all said and done, I fully understand that some of the decisions I have made have created a lot of national debate.  But I want you to know something, that when I go home and look in the mirror in Crawford, Texas, after my time, I will be able to have said, he didn't change his principles to be the popular guy, you know, he stood for what he believed.  (Applause.)

Q    Mr. President, I really appreciate your emphasis on the universality of freedom.  I'm wondering if and how the United States can promote liberal democratic reform in countries like Saudi Arabia, and whether you could address specifically whether it is, perhaps, American support for these autocratic regimes that are creating such an Islamic backlash against the United States?

THE PRESIDENT:  That is a -- boy, I don't want to be Mr. Gratuitous, say, fabulous question, but it's really one of the fundamental questions that has caused a lot of debate in Washington, D.C. about my freedom agenda.

There are some who say that promoting democracy and liberty in the Middle East is a waste of time.  I happen to believe that, kind of, managing stability doesn't address the root cause of the problems that caused 19 kids to get on an airplane and kill 3,000 of our citizens.  And so part of our strategy to defend the country is the promotion of freedom around the world.  I also, in my second inaugural address, believe in the interests of the United States to challenge tyranny wherever we find it.  As an aside, and I'm not suggesting my friends here, the scribblers over here are saying this, but some have called him hopelessly idealistic to believe in the power of freedom to transform parts of the world that seem impervious to liberty.

I believe it is the only realistic way to protect ourselves in the long-term, and that is to address the conditions that create hatred, envy, and violence.

The other thing that's important to note is that societies, depending upon their past, take a while to achieve freedom as we define it.  In other words, some move at snail's pace, some move, obviously, quicker.  And all the societies will reflect their own traditions and histories.  So when you hear me talk about the freedom agenda, it's not like, I expect Jefferson democracy to be blooming in the desert.

Secondly, friendship with leaders makes it easier to have a frank and candid discussion in a way that doesn't offend.  And my friend -- I do have a good, very close relationship with King Abdullah of Saudi Arabia, and I'm proud of that relationship.  It gives me a chance to be able to share with him ideas about -- in a private way, obviously not so private now -- (laughter) -- why I believe giving people move voice in the affairs of their government is in the interests of their government.  Same with my friend, President Mubarak, of Egypt.  I have made it clear, for example, that -- and by the way, the Egyptians had a presidential election that was quite modern and different.  And I don't believe that it's going to be possible to be able to have a less-free presidential election during the next round.

And so there is progress being made toward more liberty, in a part of the world that most people said had no chance to be a place for democracy to take hold.  I will give you the -- in Yemen there was an election that was supervised by international bodies.  They came out and said, it's a fair election.  There are women now serving in Kuwait parliament.  Jordan, the King of Jordan is making moves toward liberalizing his society.  I think, slowly but surely -- and by the way, this is a long process.  Remember, I talked about the aftermath of the Korean War.  This is like -- we're talking 55 years later.  It takes a while.

And the fundamental question facing the country is, will we be engaged in the Middle East helping moderates defeat and fight off radicals -- hopefully not militarily every single time, hopefully rarely militarily -- but by defeating an ideology with forms of government.  And it's really going to be an interesting debate.  I have staked my claim for the first part of the 21st century.  I will tell you, I am worried about our country becoming isolationist and protectionist.  We have been through isolationist and protectionist spells in our history.  One of my concerns is that people say, it is not worth it to be engaged as heavily as we are in parts of the world, particularly the Middle East.  I'm concerned about that.  I'm concerned because I believe it will be missed opportunity to help people realize that -- if you've got a Muslim brotherhood doing a better job of providing health care and education, the way to deal with that is to do a better job than they are, as opposed to ignoring the realities on the ground.  And that's what open societies that have got an election process force people to do.

I was criticized by some that upon insisting that the Palestinian elections go forward.  I believe elections are the beginning of the reform process, not the end.  I believe elections have the capacity to show the elite what's right and what's wrong.  And I believe the Hamas elections in the Middle East made it clear that the Palestinians are sick and tired of corruption, and government that was not responding to their needs.

I wasn't happy with the outcome of the election -- sometimes that happens, you're not happy with the outcome of elections.  (Laughter.)  But I was inspired by the fact that the Palestinians went to the polls and said, in the fairest way possible, we're sick of it.  Arafat has let us down; no peace.  We want to live in peace.  Where's the prosperity?  Let's get us another bunch in there and see if they can do the job.  The problem is, is that the new crowd they have in there refuses to recognize Israel's right to exist, which runs contrary to our policy.  And, therefore, we will continue to take the posture we're taken, because we're interested in peace.

I'm interested in helping the Palestinians develop a Palestinian state.  It's all along the same agenda, by the way, which is the freedom agenda.  I believe the only way for Israel to have secure peace in the long run is for there to be a democracy living side by side with Israel in peace.  I'm afraid that Israel will ultimately be overrun by demographics in order for her to remain a Jewish democratic state.  And yet, Hamas wins.  And you can't expect an Israeli democratic elected official to negotiate with a group of people who have avowed to destroy them.

And hopefully, at some point in time, the situation will get clarified, if the people have another right to express themselves, and that right ought to be, are you for a state or not for a state?  Are you going to have people that prevent a better future for emerging from you?  By the way, this all started with the elections.  And they said, oh, you shouldn't have elections, you shouldn't have been fighting against them.  Why would I fight against elections?  I'm for elections.  I think elections are important for society.  I think -- and I think they're equally important here as they are in the Middle East.

And the fundamental question, really, facing in the long-term on this is, will the United States believe that the value system that has enabled our country, by the way, to emerge -- and it took us 100 years to get rid of slavery, for example.  Far be it from us to say we're perfect.  We had a great Constitution, but our history has been scarred by treating people like chattel, with slavery, which is an abhorrent part of our past.  But nevertheless, it takes a while.  And it takes patience.  But it also takes great faith and certain value systems to help societies emerge.

The other question is on trade.  And by the way, I happen to believe isolationism and protectionism go hand in hand.  As you know, I'm an open-market trader.  I believe in free trade.  I think competition and trade not only helps the United States, I think it's the best way to alleviate poverty around the world.  And that doesn't mean you don't enforce trade agreements.  Recently we've enforced trade agreements with China -- not trying to shutdown trade, but trying to enhance trade, trying to make trade more palatable to people in the United States, recognizing that there is such thing as fair trade, as well as free trade.

But I'm concerned about people saying, well, it's just not worth it, shut her down, let's make it harder to trade.  There's going to be some interesting trade votes coming up in front of the Congress here -- free trade agreement with Peru and Colombia are coming up.  And we'll find out whether or not the leadership and both Republicans and Democrats are truly committed to not only our neighborhood, but trading in a way that enhances prosperity for both sides of the equation.

We're in the middle of negotiations on the Doha round of WTO.  I hope some of you are concerned about world poverty.  I certainly am.  And the best way to deal with world poverty is to encourage prosperity through trade and opening up markets.  And we're in complex negotiations, and I'm dedicated to getting this round completed in a way that meets our interests, but also meets other interests.

I want to share with you one other thing, then I've got to get out of here.  You know, Laura says, you get up there and all you do is talk and you love to hear yourself talk.  (Laughter.)  I want to share one other aspect of our foreign policy.  I believe to whom much is given, much is required.  And I want to share something about this great, generous nation, for which you deserve a lot of credit.

Whether it be on HIV/AIDS or malaria, the United States is in the lead.  And when I got elected, I was deeply concerned about the fact that an entire generation of folks on the continent of Africa could be wiped out by a disease that we could not cure but halt.  And I set up what's called the Global Fund for AIDS.  And yet it kind of sat there empty.  It was a deal where everybody could contribute, and then the United States would match to try to encourage commitments, but it didn't fill up.  And so I went to Congress and asked that they spend your money on a unilateral initiative where we would take on I think the 17 most or 19 most affected countries in the world and deliver antiretroviral drugs.

Foreign policy is more than military.  It is more than just spreading freedom.  It's also, in my judgment, in our interest to base it upon that admonition, if you're blessed, you ought to help others.  And as a result of the American people, we spread antiretrovirals or got antiretrovirals to 850,000.  That's up from 50,000 in three years.

We're all interconnected in this world.  What happens overseas matters here at home, from a security perspective, but I also believe it matters here at home from the perspective of keeping our spirits strong.  It's in the interest of this country that we be engaged in freeing people from tyranny, the tyranny of government and the tyranny of disease and hunger.

I appreciate you giving me a chance to come and visit with you.  God bless.  (Applause.)

 END                    2:25 P.M. EDT